Market Beat: The difference between bulls and bears

Related Media

TRUCKEE, Calif. — Recently while taping one of my weekly radio shows, I fielded a question from the audience about whether there were any stocks that I was particularly bullish on.I answered the question, and the next question that followed was “are there any stocks or sectors that you are bearish on?” Once again, I identified some areas of the market that I thought were possibly due for a downturn.The next question, from a young member of the audience caught me by surprise; it was “what do you mean by bullish or bearish?” I thought that everybody knew what a bull market or a bear market was, but for those who don’t, a bull market is going up and a bear market is going down. If you’re bullish on a stock it means you think that it will go up, and if you’re bearish on a stock that means you think it is due for a decline. Pretty basic stuff, but I can see how it could be confusing if you’re not familiar with stock market vernacular.Those answers lead to another question from the audience, one that I love, and that I have found a lot of people are not familiar with, and that was, “where in the world do the terms bullish and bearish come from?” That’s a great question, and the answer is really interesting.It goes back to the early days of California history during the Gold Rush. For entertainment, the miners would find the meanest, nastiest bull they could. Then they’d go out and trap a live grizzly bear. The grizzly, also known as ursus horriblis, used to be plentiful in the state of California and adorns our state flag. The California grizzly is now extinct, the last one being shot in 1922. The grizzly bear has a well-deserved reputation for being one of the toughest, most fearless brawlers in the entire animal kingdom.Well, the old timers would round up a Spanish bull and a grizzly, put them in a pen and watch them fight. Large sums of money were wagered on the outcome. During the course of the battle, the bull would typically strike upward with his horns, while the bear would rise up on his haunches and strike down at the bull with his paws. The familiar stock market terms bull and bear market came from these fights, and that’s why a bull market goes up and a bear market goes down.Kenneth Roberts is a Truckee based Registered Investment Advisor. Information on his money management service can be found at www.fusiontargetretirement.com or by calling 775-657-8065. Past performance does not guarantee future results. Consult your financial adviser before purchasing any security.